Crude Oil Slump, Upstream Prices Collapse, Textile Raw Materials Market Is Hard To Get Away With

After a disagreement with Russia on Friday's negotiations with Russia to cut production agreements, Saudi Amy then announced the launch of a "suicide" oil price war directed at Russia, with the largest discount rate "at least 20 years since the biggest drop".

Roger, a veteran OPEC observer, said that this means that the price may fall below $20 U.S. dollars a barrel. According to preliminary estimates, once speculators remove their long positions, the oil may fall from the current US $45 to the US $20 range or even to the US $10 range.

At present, as news comes out, US oil and cloth oil both plummeted over 8%. The Middle East stock market collapsed today (the Middle East closed on Friday), the Saudi stock market opened up a drop of over 7%, and the Kuwait stock market plunged more than 10% in a direct blow to the market to suspend trading. The world's most profitable company, Saudi Amy, opened up below the issue price, falling 8.18% throughout the day, or about 1.2 oil market value.

PTA opened limit encounter

As the oil derivatives industry, the polyester industry is also hard to escape. On Monday, PTA and ethylene futures were down. In terms of PTA, the price of naphtha fell, leading to the increase of TA processing fee to 600 yuan / ton level. Under the temptation of profits, we believe that the TA plant will start actively and the supply pressure will return to the market. In terms of EG, port inventory has exceeded 800 thousand tons. CCF news indicates that the inventory of traditional equipment is high, especially for private enterprises. By the end of March, the port inventory of ethylene glycol is expected to rise to around 105-110 tons. From this logic, the upstream profit squeeze, TA, EG and other operating rates rise, output increases, and the downstream is still in the gradual recovery, and some downstream manufacturers may have a wait-and-see mentality on the upstream price, adjust the recent stock planning. Therefore, in the downward trend of oil prices, the downstream is also difficult to be independent.

The market of polyester staple fiber is slightly panic.

Although the market response of polyester staple fiber is slightly behind that of the futures market, there are 6000 yuan / ton and 6100 yuan / ton selling price in the market. But generally speaking, polyester staple fiber is slightly better than other polyester varieties. Since the Spring Festival, the market has gone through two waves of centralized shipments. The total inventory level of enterprises is about 11 days, which is far below the level of polyester filament products. And the domestic market demand has gradually recovered. As a relatively concentrated consumption area, Hubei will also be restarted in the middle of this month. In the background of relatively weak environment, the polyester staple market is difficult to escape, but it is more resistant than other polyester varieties.

ICE cotton is difficult to be independent.

Chemical fiber products are the main substitute for cotton fiber. Affected by the price advantage, its role in the cotton market will increase, which will affect the downstream consumption demand of cotton and have an adverse impact on cotton prices.

On the 6 day, ICE cotton fell completely. 2003 the settlement price of the contract was 62.97 cents / pound, down 56 points; the main 2005 contract settlement price 62.79 cents / pound, fell 56 points; 2007 contract settlement price 63.51 cents / pound, fell 52 points; other contracts fell 37-57 points.

2005, the contract opened at a low level and traded all day. After the opening, the trading center rebounds under the support of low purchase. The 63.27 cent of the day's high point is lower under the pressure of profit taking. The intraday drop to 62.35 lows in the day rose slightly against the support of buying. However, due to the lack of upward momentum, after several shocks, it failed to continue the previous day's rally and finally dropped significantly.

Summary and analysis: In the long run, the fall in oil prices should be favorable for the development of chemical fiber industry. The downstream of chemical fibre is textile, which is close to terminal consumption. Prices are relatively less volatile by raw materials, and benefit from falling costs when crude oil prices fall. The drop in oil prices will significantly reduce the cost of the chemical fiber industry. Compared with the chemical fiber industry, such as polyamide and polyester, which has a large production capacity, the sub industries that need stable spandex and polyester industrial yarn will benefit more obviously.

However, due to the impact of the epidemic, the textile industry is slowly recovering, and the downstream demand is still the biggest problem. The adverse impact of the continued decline in the crude oil level makes it difficult for the textile raw materials market to be independent or there will be a continuous downward trend.